Why Are People Moving To Florida?
Statistics from the Florida Office of Economic and Demographic Research (OEDR) report that approximately 387,000 people moved to the state between April 2019 and April 2020. This is fairly comparable with projections for the next five years, which estimate that Florida will add roughly 303,000 people each year – approximately 831 residents every day. There are several reasons why the state is experiencing such an influx, even if the COVID-19 pandemic has slowed it down – but one of the most compelling, especially for older people, is Florida’s laws surrounding taxes and estate planning. Saving on taxes means more to give to one’s beneficiaries.
Legal Tax Shelters
One of the most appealing things about Florida, especially for those over the age of 45, is that the state has neither an estate tax, nor an inheritance tax, nor a state income tax – the state constitution actually restricts any attempt to institute them. Most of those new residents are coming from states like New York and Illinois, where all three taxes are collected. Florida does have ways to recoup some of the money that other states might make in taxation – for example, fees to license cars or boats are often higher than they would be elsewhere – but in the end, the Florida resident generally comes out ahead.
Another significant way that Florida residents save on taxes is known as a homestead exemption. Under state law, a homestead is a piece of real property that is designated as a person’s primary residence. It cannot be reached by creditors under state law – for example, if you have outstanding debts or are filing for bankruptcy, your homestead cannot be ‘attached’ or placed under a lien by creditors in order to satisfy those debts. Most states have homestead exemptions, but only Florida’s is uncapped, meaning there is no upper ceiling on how much value you can protect. New York, for example, only allows a homeowner to protect between $75,000 and $150,000 worth of value in your homestead, depending on the county where it is located.
Strong Asset Protection Laws
In addition to the tax savings one can reap upon making their home in Florida, the state’s laws are also geared toward protecting assets. The homestead exemption is one of the strongest asset protection laws, but other assets – particularly liquid assets, such as the proceeds of a life insurance policy or the funds in an annuity – are exempted from creditor claims. This means that it is more likely you will be able to pass those assets down to the heirs you choose, instead of having to devalue them.
Asset protection laws have the general aim of helping people avoid the probate process, because if an estate has to go through Florida probate, it means that assets can be sold off in order to pay creditor claims. However, because Florida’s laws are so strong, you should be able to preserve the bulk of your estate so that you can grant it to the people you want to have it. Devices like trusts, coupled with Florida provisions that protect assets held by married couples, can minimize the losses for your estate in going through the probate process.
Contact A Naples Estate Planning Attorney
If you have questions, concerns or just want to set up a complimentary consultation to discuss your personal legal issues in a confidential setting, contact James R. Nici, the Managing Partner of Nici Law Firm, a Naples estate planning attorney with almost 30 years of legal experience. This may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule your complimentary consultation.
Resources:
floridabar.org/the-florida-bar-journal/estate-planning-with-tenancy-by-the-entireties-property/
wtsp.com/article/news/regional/florida/covid-19-slows-migration-to-florida/67-cd168c3a-0ff0-4f61-b6a6-9eb244ad9fed
